Pre-Approval vs Pre-Qualification: What's the Difference?
I get asked about this all the time. Someone will say, "Cilicia, I'm pre-qualified!" and I have to gently explain that's great, but if they're serious about making an offer in Forest Grove's market, we need to talk about pre-approval.
Here's the thing: these two terms sound almost the same, but they mean very different things to sellers. And after 20+ years in real estate, I can tell you that understanding the difference can make or break your offer.
Pre-Qualification: The Quick Estimate
Think of pre-qualification as dipping your toe in the water. You call up a lender, tell them about your income, debts, and savings, and they give you a quick estimate based on what you've told them. The whole thing can happen in a phone call or a few minutes online.
They're not checking your documents or verifying anything—they're basically taking your word for it. You'll get a rough idea of how much you might be able to borrow, which is helpful when you're just starting to look at homes.
When pre-qualification makes sense:
You're still figuring out if buying is even realistic
You want to know what price range to look in
You're months away from actually making an offer
You're shopping around with different lenders
Pre-Approval: The Real Deal
Now, pre-approval? That's a different story. This is where the lender actually digs into your finances—they'll want to see your W2s, pay stubs, bank statements, and they'll run a credit check. It takes more time, usually a week or so, but you walk away with a pre-approval letter that says exactly how much you're approved to borrow.
Most pre-approvals are good for 60 to 90 days, so you don't want to get one too early.
Here's what sellers see when you hand them a pre-approval letter: you're serious. You've done your homework. A real estate agent and seller know you're a qualified buyer who can make a competitive offer. In a market like ours in Forest Grove, where good homes can get multiple offers, that pre-approval letter can be the thing that tips the scales in your favor.
What I Tell My Clients
If you're just browsing Zillow on Sunday afternoons and dreaming? Get pre-qualified. It's easy and it'll help you figure out what's realistic.
But if you're driving around neighborhoods, going to open houses, and ready to write an offer when you find the right place? Get pre-approved. Do it before you fall in love with a house. I've seen too many buyers heartbroken because they found their dream home but couldn't move fast enough.
The Forest Grove Reality
Our market can be competitive, especially for homes under $500,000. When I'm representing a seller and we get multiple offers, the pre-approved buyers always get taken more seriously. It's not being mean—it's just that sellers don't want to risk their sale falling through because financing couldn't be secured.
I've worked with buyers at every stage, and here's my honest advice: if you're ready to set a homebuying budget and you're planning to make an offer in the next few months, go straight to pre-approval.
One Last Thing
Neither pre-qualification nor pre-approval is a guarantee you'll get the loan. Things can change—you lose your job, your credit score drops, or the house doesn't appraise for the purchase price. And here's something people forget: you're not locked into using the lender who pre-approved you. You can shop around.
But starting with a solid pre-approval? That's how you show sellers you mean business. And in this market, that matters.
Want to talk about what makes sense for your situation? I've helped hundreds of buyers navigate this process in Forest Grove, and I'm happy to point you toward good local lenders who'll treat you right.
Cilicia Philemon is an Accredited Buyer's Representative with Premier Property Group in Forest Grove, Oregon, with over 20 years of real estate experience.5
